To the despair of almost every informed economist, by New Year’s Day, Medicare recipients who want coverage for 2006 will have chosen a prescription drug plan. Even the former chairman of the ...

When the 2008 financial crisis pushed the global economy to the brink, governments intervened with massive taxpayer-funded bailouts for banks deemed “too big to fail.” This sparked a furious debate: ...

Desperate times call for desperate measures. In recent years and in the face of unprecedented changes in the climate system, some previously unknown and risky solutions have been proposed to put a ...

Florida’s home insurance market has long been a mess. With private property insurance getting scarcer and more expensive, some members of the legislature are pushing for an even greater role for the ...

Why would a big bank with so much at stake not care about the risks that they were taking? Well, at that point, they'd all been bailed out. I mean, my feeling at that point was, well, of course they ...

I’ve been making the argument that while moral hazard, in the wake of the financial crisis, is now a serious problem (because of the implicit guarantee that big banks will not be allowed to fail), it ...

To date we have taken apart the firm and examined where institutions offer no advantage over bargaining by individuals, or relying on the price mechanism. We have seen two early explanations for ...

The prospect of judicial review may cause legislators to adjust their behavior to anticipate the court’s response. This can serve as a source of moral hazard for legislators. Legislators can pursue ...

After sitting on the sidelines for the first nine months of the current mortgage crisis, the Federal Reserve took dramatic action in March. It opened the discount window to investment banks and ...

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated. “Moral hazard” is a well-established ...

I want to revisit the subject of moral hazard and the financial crisis, which I posted about yesterday, because I think the argument I made has been misunderstood in an important way, and because I ...